This is how Democrats get shellacked in 2022
In the 2010 midterms, Democrats were routed because they did not completely fix the Great Recession. Obama economic adviser Larry Summers deliberately lowballed the Recovery Act stimulus in 2009, and Obama himself pivoted to austerity by early 2010. As a result, unemployment was nearly 10 percent on Election Day that year, and the Democrats were swept at the federal and state levels. In the words of Obama, it was a "shellacking."
Biden adviser Ted Kaufman, who is in charge of Joe Biden's transition team, signaled in comments to the Wall Street Journal that a Biden administration may make the exact same mistake again. "When we get in, the pantry is going to be bare," he said. "When you see what Trump’s done to the deficit … forget about COVID-19, all the deficits that he built with the incredible tax cuts. So we’re going to be limited."
As a factual matter, Kaufman is grotesquely mistaken on at least two levels. The economy will still be in a deep hole next year, and I have argued before, so long as the economy is below capacity, the American government can borrow without limit. The pantry is not "bare" — on the contrary, bond markets are howling for the government to issue more debt so there will be a goodly supply of safe assets. Second, even if one is worried about the national debt, it is self-defeating to try to cut it down before full employment is reached. As none other than Larry Summers demonstrated in a paper with economist Brad DeLong after his Recovery Act faceplant, borrowing to stimulate during a recession literally more than pays for itself by preventing economic damage and boosting future tax revenue.
The most important fact about economic policy over the last 12 years, learned at a terrible cost in both Europe and the U.S., is this: Austerity during a recession makes everything worse.
All this is truly unfortunate to hear from Kaufman, who is one of the more progressive advisers on Biden's team, and served well in Biden's Senate seat for two years attacking Wall Street corruption. But unless this kind of thinking is stamped out immediately, a Biden administration will make Democrats lose the 2022 midterms just like they did in 2010.
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